A Washington, DC public relations entrepreneur watched in
horror as her computer screen went blank. She hurriedly checked the
Yellow Pages and called the first technician she found. He assured
her the files could be retrieved and her computer would be working
in a few days. She was relieved. Months of research for several
clients' projects and a long list of hot business prospects
weren't lost after all.

Wrong. Several computer crashes later, the entrepreneur
called a second technician and learned the sad truth. The replaced
parts weren't new but used, and most of her system's
components had been stripped and replaced with secondhand
parts.

In Wisconsin, the owner of a patio furniture and supply store
received a phone call from a man on the West Coast who seemed to
know the entrepreneur's operation well. The caller had a large
supply of merchandise a customer didn't want and suggested it
would be perfect in the Wisconsin store. He'd give it away if
the owner paid the freight fee. The man wired $950 to the West
Coast and waited for the merchandise. It never arrived.

These stories aren't unusual. Small-business owners are easy
prey for rip-off artists of all kinds. "The atmosphere in a
small business can be very appealing to a potential scam
artist," says Barry Goggin, president of the Better Business
Bureau in Sacramento, California. Many small businesses, he
explains, don't have a proper system of checks and balances to
protect themselves. "In larger companies, purchase orders are
required, and invoices go through three different hands before
being paid," says Goggin. "You generally don't find a
rigid structure like that in a small business."

To protect your business from being taken, here's the inside
word on six common scams and how to avoid them:

Scam #1: Office supply rip-offs. If the offer sounds too
good to be true, it probably is. Dishonest peddlers lure their
victims with claims of a liquidation sale or a shipment mistakenly
labeled with your company's name that you can have at a greatly
discounted price.

Other con artists might claim to be conducting an office
equipment survey. After you innocently provide information about
your copy machine, for example, the individual will call back and
pose as your new supplier or authorized dealer for the products you
use for your copy machine.

Ordering supplies from out-of-state callers can be a waste of
time and money. Frank D. Vincent, a Sacramento, California,
insurance executive, recalls the day he received a call from a New
York City salesperson who offered him a great deal on copy paper.
"Saying he was from New York made him sound important, and his
call easily got past the secretary and to my office." The deal
sounded good, so Vincent bought six boxes of paper.

"He delivered what he said, but the paper was junk,"
says Vincent. "It was so thin, it easily ripped and made
terrible copies. We threw it all away."

Solution:Whenever possible, do business with local
suppliers. "I want to do business with people I know in the
community," Vincent says now. You should also make it a rule
never to buy from a new supplier by phone or mail before you check
out the company's background and references. Insist on written
purchase orders and don't accept c.o.d. shipments or pay cash
for a shipment.

Scam #2: Phony invoices. Knowing small businesses
don't use elaborate accounting systems, scam artists often use
phony invoices to great advantage. Here's how it works: The
swindler calls your company to get your name and other information.
Then he sends an invoice for an amount just small enough not to
attract attention. The invoice might be for goods you never ordered
or for advertisements in bogus publications.

Solution: Set up a system of checks and balances to weed
out bogus bills. Every order should be given a shop number. When an
invoice is received, pay it only if it has a matching shop
number.

Scam #3: Sneaky solicitations. A popularscam involves
what look like invoices for directory listings or advertisements
but are really solicitations, with this disclaimer in very fine
print: "This is a solicitation. You are under no obligation to
pay unless you accept this offer." Sending solicitations with
such a disclaimer isn't illegal. But many business owners miss
the small print and pay anyway.

Solution: If a "bill" arrives by second-class
or bulk mail, beware. It's probably a solicitation. When you
receive a "bill," match it with a purchase order for the
product. If you can't find one, chances are you never ordered
the item.

Scam #4: Charity pleas. Want to support your community by
donating money to build a home for abused children? It sounds like
a great cause, but the charity may not be legitimate.

Solution: Be cautious. Some solicitors use names that
closely resemble those of well-known organizations. Before you
give, check with the local charity registration office of your
state attorney general's office and with your Better Business
Bureau. If a caller offers to send a "runner" to pick up
your contribution, pleading that the group needs your money now,
hang up the phone. It's a scam.

Scam #5: Phony phone books. Let's say you receive a
copy of an ad you placed last year in your local Yellow Pages. An
attached statement reads "present listing information"
and "renewal payment stub." You assume you're
renewing the ad in the local directory and mail a check.

Don't move so quickly. Small businesses are often billed for
what they think is ad space in locally distributed Yellow Pages.
What you're really getting is your name in a directory
that's distributed in very limited quantities or not published
at all.

Solution: Call your phone company and ask if it sent the
solicitation. Then call your Better Business Bureau for information
about the Yellow Pages promoter. Don't pay for the ad unless
you get satisfactory information.

Scam #6: Technical difficulties. A repair technician
might offer you a free inspection of your office equipment to
ensure it's in good working order. That's fine if the
technician is qualified to perform the work. Otherwise, you could
suffer inferior materials, poor workmanship and the possible loss
of your equipment.

Solution: When someone solicits you, ask for references.
If you decide to accept the offer, insist your equipment remain at
your business while it's being inspected or repaired. If you
must send your equipment in for repairs, request that damaged parts
be returned. If you suspect foul play, call another technician for
a second evaluation and contact the Better Business Bureau if
you've been ripped off.

One sure way to protect yourself against any scam is to listen
to the bell that goes off in your head when an unknown caller
offers you a deal too good to be true. If the person doesn't
give you references, avoids leaving a phone number and wants you to
send cash now, chances are you're about to be conned.
You've got nothing to lose by saying "no."

Fraud Squad

You don't have to be a Better Business Bureau (BBB) member
to receive its free pamphlets on everything from telemarketing
schemes and credit-card laundering to tips on charitable giving.
Contact your local BBB for information.

If you've been scammed, you can report the incident to the
National Fraud Information Center in Washington, DC, where
counselors will help you file your complaint. Call
(800) 876-7060 or visit http://www.fraud.org